A Republican Replacement Plan to the ACA is Released

Two Republican lawmakers have revealed proposed legislation that would replace the Affordable Care Act. There are many question marks about the bill, but one certainty it provides is that it would continue the policy now in place of banning insurance companies from denying coverage based on preexisting conditions. Other popular Affordable Care Act provisions that would be preserved include that insurers would be barred from enacting lifetime caps on benefits, and that children would be allowed to stay on their parents’ insurance until age 26, according to a USA Today report.

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However, the bill has many observers in the health insurance industry wondering if the proposal is workable, or whether it can pass in a Republican-led Congress.

Senators Susan Collins of Maine and Bill Cassidy of Louisiana introduced the bill, which was co-sponsored by two other Republican senators. The Collins-Cassidy plan appears to be geared toward giving states more flexibility in health insurance policy. Under the bill, states could opt to keep the Affordable Care Act as is, deposit 95 percent of the ACA money into health savings accounts for uninsured individuals (who would be enrolled in high deductible plans), or forgo federal funding for health insurance altogether and create their own health insurance plan.

The political calculus for such a proposal may be to draw votes from both sides of the aisle, as it would allow legislators from deep blue states to say they have preserved the Affordable Care Act for their constituents, and legislators from deep red states to say they have rejected it. However, there will be some Republican lawmakers who will object to the proposal because it continues Affordable Care Act taxes to fund the new health insurance marketplace. Also, Senator Chuck Schumer of New York, the Senate leader for the Democrats, has already said the plan is unworkable and would cause chaos in the health insurance marketplace.

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Such chaos may be unavoidable at this point, however. President Donald Trump signed an executive order instructing federal agencies to “waive, defer, grant ­exemptions from or delay” any part of the Affordable Care Act that could cause a financial or regulatory burden, according to a Washington Post report. The wording of the order provides a lot of room for interpretation, and could even mean that the Trump administration will not enforce the tax penalty for those who do not have health insurance. Scrapping key regulations of the Affordable Care Act could cause it to collapse, according to health insurance industry stakeholders quoted in the report.

Republican lawmakers and Mr. Trump have sent conflicting signals about when the Affordable Care Act should be repealed and when new legislation to replace it will be ready for a vote. They also have differed on what the new legislation should include.

The Collins-Cassidy proposal is the first replacement plan announced since Republicans assumed control of both the Legislative and Executive branches of government, but it is unlikely to be the last. Full details of the plan have not been released, but you can read a fact-sheet about what’s proposed here.

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